Why Campaign Finance Laws Are Under Fire

Supreme Court decision to review limits on campaign donations could foreshadow more regulations being lifted.

Another brick in the wall of federal campaign finance regulations is up for review at the Supreme Court. And it could help bring down the rest of that wall.

The Supreme Court accepted a case Tuesday reviewing aggregate limits on individuals' giving to campaigns. Donors can only give $2,600 per election to candidates, but they have an additional limitation to consider: They are allowed to give no more than $123,200 total — $48,600 to candidates and $74,600 to regular PACs and party committees — over a two-year election cycle. That's the provision Alabama Republican Shaun McCutcheon and the Republican National Committee are challenging in the new case. McCutcheon had wanted to give more than $50,000 to candidates and more to other committees in 2012, but he was barred by federal law.

A decision in McCutcheon's favor wouldn't technically destroy the most basic campaign finance regulation, the one limiting how much an individual can give to a single candidate or party. But it would seriously dilute the provision and could even lead to the undoing of contribution limits in the future, according to campaign finance experts.

First, from a practical perspective, eliminating the aggregate individual contribution limit would have similar effects to eliminating the limit on giving to individual candidates, according to Tara Malloy of the Campaign Legal Center. "Current law allows parties and committees to transfer funds at will," said Malloy, who is a senior counsel at the CLC. "You could give hundreds of thousands to different party committees and then they could transfer it around. It could be pooled for the benefit of certain candidates." In other words, state parties or candidates could move all of one donor's money into the same place as though the donor had just written one check.

Second, the case could also allow individuals to inject extraordinary amounts of money into the political process at the candidate level, though the super PAC era has conditioned people to expect that. According to calculations by the Campaign Legal Center, someone could give more than $2 million to one party's federal candidates if the donor decided to bankroll an entire slate. "If you add party committees, you could give $3.5 million in one cycle," Malloy said.

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Some super PAC donors already give in those heady amounts, so it wouldn't be unprecedented. But donations directly to candidates are worth more in the end because candidates can buy advertising at lower rates than outside groups.

Finally, the Supreme Court case on aggregate limits could also play a role in bringing down the most significant current campaign finance rule: the limit on what one individual can give to one candidate. The McCutcheon case does not touch specifically on that issue, but it could provide an opening for future action. "It would give an indication of where the Court is on limits in general," said Bob Biersack, a senior fellow at the Center for Responsive Politics. This sort of thing happens. Chief Justice John Roberts mused in a 2009 opinion about whether sections of the Voting Rights Act were obsolete; later this month, the Court will hear a case directly challenging Section 5 of the law. McCutcheon and his team have already signaled that they would seek to challenge the individual donation limits if their challenge to the aggregate rules fails, according to SCOTUSblog.

The limit on aggregate donations might not be perfect for the pro-regulatory crowd. Absent a massive audit by the Federal Election Commission, it would be very difficult to track large numbers of small, unitemized donations to candidates, Malloy said. But the regulation helps stem some flow of money into politics, and if it goes down, it could eventually take with it other limits on what individuals can give to candidates.